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Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!
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Simione Consultants: The Medicare HHA Cost Report LETS GET IT RIGHT!

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Simione Consultants LLC
The Medicare HHA Cost Report LETS GET IT RIGHT!

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  • 1. Simione Consultants, LLC
    The Medicare HHA Cost ReportLETS GET IT RIGHT!
    www.simione.com
    800-949-0388
  • 2. 2
    Course Objectives
    Understand the Medicare Regulations Applicable to Cost Reporting
    Medicare Cost Report Filing Requirements
    Identify Sources of Information Needed to Complete the Cost Report Worksheets
    How to Use the Cost Report as a Management Tool
  • 3. Regulations
    Costs and General Instructions
    CMS 15 - Provider Reimbursement Manual Parts 1 and 2
    Part 1
    Defines reasonable costs of providing services to Medicare patients
    Allowable versus non-allowable
    Requirement to file cost reports
    Allocation statistics used in cost determinations
    Provider rights in payment disputes
    Part 2 – General instructions on the cost report and their forms
    3
  • 4. Regulations
    Visits
    Medicare Benefit Policy Manual Chapter 7
    Definitions of home health services covered by Medicare
    Billable Visits
    CMS 15 -1 and 15-2 Provider Reimbursement Manuals
    Regulations will be referred to throughout presentation
    4
  • 5. General Information
    General Information
    Who is required to file the cost report?
    All providers participating in the Medicare Program
    (CMS 15-1 Section 2413)
    Intent of Cost Report
    Information is submitted annually to CMS/RHHI for settlement of costs relating to health care services rendered to Medicare beneficiaries
    5
  • 6. General Information
    PPS eliminated the monetary settlement of costs but did not eliminate the requirement to file annual cost reports
    Who Files?
    Provider-based
    Hospital based, SNF (nursing home) based home health agencies
    Freestanding
    6
  • 7. General Information
    Types of Cost Reports
    Full cost report
    Low Utilization (CMS 15-1, Section 2414.4.B)
    Less than 10% Medicare utilization, or
    Less than $200,000 in Medicare payments
    No Medicare Utilization (CMS 15-1, Section 2414.4.A)
    No covered services were furnished during the reporting period and
    No Medicare claims will be filed for this reporting period
    7
  • 8. General Information
    Cost Report Periods (CMS 15-1, Section 2414)
    Annual reports cover a 12 consecutive month period of operations
    Providers may select any 12 month reporting period
    Recommend follow accounting period used in operations
    Cost report period can be from 1 to 13 months
    New or terminating providers (CMS 15-1, Section 2414.1 and 2414.2)
    Final cost report
    Change of ownership - partial cost report
    - Stock purchase - no
    - Asset purchase - yes
    8
  • 9. General Information
    Requirements to Change a Cost Reporting Period (CMS 15-1, Section 2414.3)
    Request to RHHI (or MAC) 120 days or more before the close of the reporting period which the change proposes to establish and must have good cause
    Chain Organization acquires a provider and wishes to change new provider to Chain Organization’s fiscal year end
    Government provider has to change fiscal year end as a result of legislative action
    9
  • 10. General Information
    Cost Report Filing Requirements
    Must be filed electronically
    Free CMS Software http://www.mutualmedicare.com/star/providers/
    Approved vendor (Next Slide)
    CDs may now be submitted
    Cost Report Due Dates
    Later of 5 months after FYE or 30 days after a valid provider statistical and reimbursement (PS&R) report is sent to the provider
    Remember - postmark date - Post Office or overnight
    No postal meter date is accepted
    10
  • 11. General Information
    11
    Vendor Listing approved by CMS for HHA & Cost Report Software
    Health Financial Systems
    KPMG, LLP
    Optimizer Systems
    Progressive Provider Services
  • 12. General Information
    Cost Reports - Little or No Settlement
    - Starting to see no adjustment settlements
     
    Still Very Important
    - Accurate cost data for CMS
    - Future rate setting - CMS is looking to rebase the PPS rates - critical role
    - Reimbursement rules have not changed - only payment methodology
    • False Claims Act provisions
    12
  • 13. Things to Consider: False Claims Act
    Financial Incentive for Whistleblowers
    Persons filing under the Act stand to receive a portion (usually about 15-25 percent) of any recovered damages
    Key Provision:
    Knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim
    13
  • 14. Things to Consider: False Claims Act
    Knowing and knowingly is defined that a person, with respect to information:
    Has actual knowledge of the information;
    Acts in deliberate ignorance of the truth or falsity of the information; or
    Acts in reckless disregard of the truth or falsity of the information,
    No proof of specific intent to defraud is required
    14
  • 15. COST REPORT CERTIFICATION (WORKSHEETS)
    CERTIFICATION BY OFFICER OR ADMINISTRATOR OF PROVIDER(S)
    I HEREBY CERTIFY that I have read the above statement and that I have examined the accompanying electronically filed or manually submitted cost report and the Balance Sheet and Statement of Revenue and Expenses prepared by____________________________________________ (Provider Name(s)and Number(s)) for the cost reporting period beginning and ending and that to the best of my knowledge and belief, it is a true, correct and complete statement prepared from the books and records of the provider in accordance with applicable instructions, except as noted. I further certify that I am familiar with the laws and regulations regarding the provision of health care services and that the services identified in this cost report were provided in compliance with such laws and regulations.
    15
    Things to Consider: False Claims Act
  • 16. Cost Report Filing Requirements
    For Full Acceptance of Cost Report
    Financial statements using the accrual basis of accounting
    Working trial balance
    Trial balance crosswalk
    Support for reclassifications, adjustments, and related party costs
    Signed Certification page
    Consider using blue ink
    CMS Form 339 Questionnaire
    16
  • 17. Cost Report Filing Requirements
    Filing a Low Utilization Cost Report
    Signed Certification page
    Waiver of Electronic Filing of Medicare Cost Report
    http://www.ngsmedicare.com/pdf/electronicwaiver_0308.pdf
    Balance Sheet and Income Statement
    Can use worksheets from the cost report
    F-series worksheets for the 1728-94 cost report
    17
  • 18. Cost Report Filing Requirements
    Filing a No Utilization Cost Report
    Signed Certification page
    Waiver of Electronic Filing of Medicare Cost Report
    Certification for Non-Medicare Utilization
    http://www.ngsmedicare.com/pdf/noutilizationcert_0308.pdf
    18
  • 19. Cost Report Filing Requirements
    Always Remember…
    Get it submitted on time
    It can always be amended it if there are inaccuracies
    Do not forget to send the payment if one is due
    If your cost report is not filed and accepted, it results in No Payment
    19
  • 20. Cost Report Filing Requirements
    Failure to file a timely and acceptable cost report results in all Medicare payments being suspended until an acceptable cost report is filed.
    (42 C.F.R. Section 405.371 [C])
    20
  • 21. Cost Report Filing Requirements
    After the Filing Deadline is Met
    If not accepted – you will receive a letter to that effect
    Specify deadline for returning acceptable cost report or payments will be withheld
    Notice of Program Reimbursement (NPR)
    Quick turnaround by RHHI
    Include any monies that may be due
    Disagreements with Monies Due
    Appeals process - 180 days from date of NPR to file
    Re-opening Requests – 3 Years From NPR
    21
  • 22. Cost Report Terminology and Definitions
    Found in CMS15-1 Section 2302
    Cost Center (Sect 2302.8)
    “An organizational unit, generally a department or its subunit, having a common functional purpose for which direct and indirect costs are accumulated, allocated and apportioned.”
    Home health agencies = services and programs
    22
  • 23. Cost Report Terminology and Definitions
    General Services (Sect 2302.9)
    These services benefit the agency as a whole
    Costs included in these cost centers are allocated to other cost centers in accordance with Medicare accepted statistical base
    Capital related costs
    Capital related – building and fixtures
    Capital related movable equipment
    Plant operation maintenance
    Transportation
    Administrative and General
    23
  • 24. Cost Report Terminology and Definitions
    Reimbursable Cost Centers
    Cost centers for services covered by Medicare Program
    Non-reimbursable Cost Centers
    Cost centers for services/programs NOT covered by Medicare Program
    Cost centers for material non-allowable costs/activities
    24
  • 25. Cost Report Terminology and Definitions
    Allowable Costs
    Costs to be either included or allocated to reimbursable cost centers.
    Defined by principles set forth by CMS 15-1 Provider Reimbursement Manual
    Non-allowable Costs
    Costs not related to patient care
    Gifts, donations, entertainment, fines and penalties
    Unallowable costs related to patient care
    Ambulance services, private duty care, dental services
    25
  • 26. Cost Report Terminology and Definitions
    Step Down Method (Sect 2306.1)
    Allocation of general service costs to reimbursable and non-reimbursable cost centers
    Home health agencies are required to use the Step Down Method (Sect 2308)
    Accumulated Cost Statistic
    Used to allocate the A&G cost center
    Direct service costs plus any allocated general service costs
    26
  • 27. Cost Report Terminology and Definitions
    CFR
    The Code of Federal Regulations (CFR) is the codification of the general and permanent rules published in the Federal Register by the Federal Government.
    Manuals
    CMS written guidelines and policies to implement Medicare regulations as set forth by the CFR
    http://www.CMS.hhs.gov/home/regsguidance.asp
    27
  • 28. Cost Report Data
    Compiled after year end closed
    Maintain dedicated cost report file
    Three main data sections:
    Statistical
    Financial
    Medicare
    28
  • 29. Cost Report Data
    Statistical Data:
    Visits
    Episodes
    Patient counts
    FTEs
    29
  • 30. Cost Report Data
    Visits (CMS 15-1 Section 2302.15)
    Accumulate all visits by service, type and by Payer
    Visit information maintained internally
    Service dates equal the period covered by the period reflected on the cost report
    Episodes
    By type of episode
    Episodes ended in the period covered
    30
  • 31. Cost Report Data
    Patient counts
    Duplicated
    Unduplicated
    Duplicated
    Patient counted every time admitted and readmitted during the cost report period
    Unduplicated
    Patient counted once regardless of times readmitted during the year
    31
  • 32. Cost Report Data
    FTEs
    Calculated based on annual hours paid divided by 2080
    Staff
    Contract
    Staff FTEs
    Payroll
    Administrative positions
    Services
    32
  • 33. Cost Report Data
    Contract FTEs
    All reimbursable service costs reported in contract column on Worksheet A
    Need to develop FTEs based on hours or visits
    If hours are not available, then rule of thumb is 1 visit = 1 hour. (CMS 15-1 Section 1409.2)
    33
  • 34. Cost Report Data
    Statistical Support for Capital Related Cost Allocations
    Need to be auditable
    Building and building fixtures
    Square feet
    Equipment costs
    Square feet or equipment dollar value
    Transportation
    Mileage
    34
  • 35. Cost Report Data
    Square Feet
    Most commonly used
    Need to maintain floor plans
    Try to keep updated with position and department changes
    Weighted average if changes occurred during year
    Exclude all common space
    Hallways, rest rooms, kitchen
    35
  • 36. Cost Report Data
    Equipment Costs
    Not used often by providers
    Dollar value of equipment
    Need to identify where the equipment is located
    Mileage
    Maintained by cost center
    Payroll records
    36
  • 37. Cost Report Data
    Financial Data
    Financial statements
    Audited versus non-audited
    Requested on the Cost Report Filing Requirements
    Providers not required to have a financial audit
    Recommend using if available
    Statistical support for capital related and other cost allocations
    37
  • 38. Cost Report Data
    Financial Statements
    Requirement - Accrual Basis of Accounting (CMS 15-1, Section 2300)
    Revenue and expenditures for expense and asset items are recorded in the period in which they are earned and incurred, regardless of when they are paid and cash received. (CMS 15-1, Section 2302.1
    38
  • 39. Cost Report Data
    Financial Statements
    Working trial balance of expenses
    Cost report filing requirement
    Recommend the Chart of Accounts corresponds with cost report needs
    Saves people time in preparing data and
    Saves money if cost report preparation is outsourced
    General Ledger
    Driven by detail of working trial balance
    Need to identify non-allowable costs
    39
  • 40. Cost Report Data
    Statistical Support for Capital Related and Other Costs Allocations
    Cost report worksheets
    Capital related and plant operation costs
    Square feet of space(s) occupied
    Equipment dollar value
    Transportation
    Mileage
    Off cost report/internal allocations
    40
  • 41. Cost Report Data
    Square Feet
    Supportive and detailed floor plans
    Need to maintain separately for all locations
    Summarize by cost report cost centers
    Exclude common space
    Hallways, rest rooms, kitchens, stairways
    Floor plans need to be updated when changes occur - weighted average approach
    Equipment Dollar Value
    Identify where all equipment is located
    41
  • 42. Cost Report Data
    Mileage
    Maintain mileage information for all employees for cost report period
    Summarize by cost report cost centers
    Internal Allocations / A&G Cost Allocations
    Time studies for employee related allocations
    Fragmented A&G or unique cost centers
    42
  • 43. Cost Report Data
    Time Studies
    Allocation of salaries and related benefits
    Two methodologies
    Periodic Time Studies (CMS 15-1 Section 2313.2.E)
    Written plan submitted to RHHI 90 days before cost report period
    RHHI approval or denial within 60 days from receipt of request
    One week a month, every other week
    Detailed records must be maintained
    Continuous
    No approval required
    43
  • 44. Cost Report Data
    Fragmented A&G or Unique Cost Centers (CMS 15-1, Section 2313, 2313.1 and CMS 15-2, Section 3214)
    Written plan submitted to RHHI 90 days before cost report period
    RHHI approval or denial within 60 days from receipt of request
    Unique cost centers = reimbursable A&G, non-reimbursable A&G and shared A&G
    Dedicated costs must be separately identified in the provider's accounting system with any direct costs recorded on a regular ongoing basis throughout the accounting period, not exclusively reliant on period ending adjusting entries
    44
  • 45. Cost Report Data
    Medicare
    Provider Statistical & Reimbursement (PS&R)
    Information related to flu shots
    Number of shots
    Administrative cost of shots
    Cost of vaccines
    Charges – Medicare and other
    45
  • 46. Cost Report Data
    Important! CMS Documentation Requirements (CMS 15-1, section 2304)
    Adequacy of Cost Information
    Information developed by the provider and used on the cost report must be auditable
    Records should be maintained consistently from one period to another
    46
  • 47. Home Health Agency Cost Report (CMS Form 1728-94)
    Worksheet S
      – Certification page
    Signed by Administrator or Officer
     
    Worksheet S-2
    - Identification information
    - Medicare Provider # (Legacy)
    - NPI Number (do not enter)
    - General questions
    47
  • 48. Home Health Agency Cost Report – Worksheet S-3 Pts I and II
    48
  • 49. Home Health Agency Cost Report
    Worksheet S-3 Part I
    Visit Data
    Definition per general instructions (CMS 15-2 Section 3205)
    A visit is an episode of personal contact with the beneficiary by staff of the HHA or others under arrangements with the HHA for the purpose of providing Medicare-type services
    Medicare type like kind visits
    All payer visits including free care
    Visits dates of service must reflect cost report reporting period reported
    49
  • 50. Home Health Agency Cost Report
    Patient visit statistics
    Number of visits and patients by discipline
    Separate for Medicare & other
    Medicare Advantage patients are considered as “Other /Non Medicare” for cost report purposes
    Non like kind services – line 7
    Non like kind services
    Home health services that do not meet Medicare eligibility criteria
    50
  • 51. Home Health Agency Cost Report
    Eligibility Criteria
    Confined to home, or in an institution that is not classified as a hospital, skilled nursing facility or a nursing facility
    Under the care of a physician with a Plan of Care in place
    Skilled intermittent or part time services must be certified by a Physician
    SN, PT, OT, ST, MSW and HHA
    51
  • 52. Home Health Agency Cost Report
    How to Count Visits
    Only report “billable” visits
    Supervisory visits should not be included unless skill rendered at same time
    Not Home Not Found visits should not be included
    Can be more than one billable visit on the same day
    Count visits, not hours for all disciplines except home health aide
    Home health aide statistics need to include both visits and hours
    52
  • 53. Home Health Agency Cost Report – Worksheet S-3 Pts III and IV
    53
  • 54. Home Health Agency Cost Report
    CBSA Codes for Episodes
    PS&R Summary shows number of patient and visits by service per CBSA
    PPS Activity Data S – 3 Part IV
    Information taken from PS&R (CMS 15-2 Section 3205)
    Summary of PPS episodes completed during the cost reporting period
    May have been initiated in prior period
    Do not include if episode begun but not completed in current period
    Medicare visits and charges by discipline and episode type (Full w/o outlier, Full w/ outlier, LUPA and PEP)
    Number of Medicare episodes
    Medical supply charges
    54
  • 55. Home Health Agency Cost Report – Worksheet A
    55
  • 56. Home Health Agency Cost Report
    Worksheet A Categories (columns 1 to 5)
    Salaries
    Employee Benefits and Payroll Taxes
    Direct assignment or allocate based on salaries
    Transportation
    Mileage reimbursement
    Contracted Services
    Other Costs
    Chart of accounts should be in sufficient detail to facilitate crosswalk from trial balance to MCR
    56
  • 57. Home Health Agency Cost Report
    Worksheet A – Cost Centers
    General service cost centers / overhead costs (lines 1 to 5)
    Capital costs – bldg (rent, building insurance, etc)
    Capital costs – MME (equipment depreciation, etc)
    Plant operation & maintenance (utilities, repairs, cleaning, etc)
    Transportation
    Administrative & general
    Be sure to classify all overhead type costs together (like and non like kind)
    57
  • 58. Home Health Agency Cost Report
    Worksheet A – Cost Centers
    HHA reimbursable services / direct patient care (lines 6 to 11)
    Skilled nursing care
    Physical therapy
    Occupational therapy
    Speech therapy
    Medical social services
    Home health aide
    58
  • 59. Home Health Agency Cost Report
    HHA Reimbursable Services / Direct Patient Care (lines 11 to 14)
    Medical supplies
    Non routine/billable only
    Routine/non-billable supplies goes to A&G cost center or direct (if supported)
    Drugs
    Flu, pneumococcal and calcimar injections – vaccine supply cost only
    Drugs administration cost in line 13.20
    DME
    59
  • 60. Home Health Agency Cost Report
    Medical supplies
    Routine (non billable)
    Not patient specific
    Non routine (billable)
    On Plan of Care
    Ordered by Physician
    Billable to payer
    Separate charge
    60
  • 61. Home Health Agency Cost Report
    HHA Non-reimbursable Services
    Non like kind Services
    Private duty (line 17)
    Homemaker (line 22)
    Other services (non like kind) (line 23)
    Telemedicine (line 23.20)
    Always Remember!!
    Column 6 = Financial statement expense total
    61
  • 62. Home Health Agency Cost Report – Worksheet A (cont)
    62
  • 63. Home Health Agency Cost Report
    Column 7 – Worksheet A-4 Reclassifications summarized
    Column 9 – Worksheet A-5 Medicare Adjustments summarized
    Column 10 flows to Worksheet B Column 0
    63
  • 64. Home Health Agency Cost Report – Worksheet A-4 Reclassifications
    64
  • 65. Home Health Agency Cost Report
    Worksheet A-4 -Reclassification of Expenses
    Move costs between cost centers
    Should do on the trial balance rather than this worksheet
    65
  • 66. Home Health Agency Cost Report – Worksheet A-5
    66
  • 67. Home Health Agency Cost Report
    Worksheet A – 5 Adjustments to expense include:
    Income offsets
    Interest income versus interest expense
    Not to exceed interest expense
    Miscellaneous income
    Vendor rebates and credits
    Non allowable expenses identified CMS 15-1
    Home office costs
    67
  • 68. Medicare Cost Report Data
    Non Allowable Expenses
    Costs not related to patient care
    Costs must be reasonable and necessary
    Prudent buyer
    Non-allowable Expense Examples:
    Depreciation expense
    Depreciation method other than straight line method only
    AHA Useful Lives – 2008 edition
     
    68
  • 69. Medicare Cost Report Data
    Non-allowable Expense Examples:
    Leased vehicles
    Mid and high end luxury automobiles
    Company vehicle
    Compensation
    Reasonableness
    Supported by compensation surveys
    Board fees
    In line with other agencies in geographic area
    69
  • 70. Medicare Cost Report Data
    Non-allowable Expense Examples:
    Gifts or donations
    Entertainment
    Marketing / promotional giveaways
    Health fairs
    Fines and penalties
    Bad debts
    Loss on disposal of assets
    70
  • 71. Medicare Cost Report Data
    Non-allowable Expense Examples:
    Franchise fees
    Need to analyze what is covered
    Apply CMS 15-1 rules
    Credit card costs
    Collection agency costs
    Life insurance premiums
    Term insurance – employee benefit
    Key man
    71
  • 72. Medicare Cost Report Data
    Lobbying Costs
    Directly incurred
    Indirectly incurred
    NHPCO %
    NAHC%
    State Associations %
    VNAA %
    Etc.
    72
  • 73. Medicare Cost Report Data
    Non-allowable Expense Examples:
    Income taxes
    Property or franchise
    Membership dues – political / lobbying portion
    Political contributions and lobbying activities / contributions
    Country club dues
    Alcoholic beverages
    Costs of buying or selling a business
    Non compete agreements
    Goodwill amortization
    73
  • 74. Medicare Cost Report Data
    Non-reimbursable Activities
    Marketing
    Solicit new referral sources
    Sales focus
    Paid commissions
    Fund raising
    Mergers and acquisition
    Establishing Non-reimbursable Cost Center Versus Non-allowable Cost to A-5
    Must be material amount
    74
  • 75. Home Health Agency Cost Report – Worksheet A-6
    75
  • 76. Home Health Agency Cost Report
    Worksheet A – 6 Costs from Related Organizations and Home Office Costs
    Report “amount charged” and “amount allowable”
    Identify related party by name and type of relationship
    Identify all related party costs even if qualify for Section 1010 Exception (amount charged = amount allowable)
    Compare to AFS footnotes
    76
  • 77. Home Health Agency Cost Report
    Related Party Transactions (CMS 15-1 Chapter 10)
    Related through common ownership or control
    Family relationships create relatedness
    Adjust cost report to “related party” costs
    Direct and indirect
    Interest on related party loans
    77
  • 78. Home Health Agency Cost Report
    Exceptions to Cost Conversion (CMS 15-1 Section 1010)
    Supplier – bona fide separate organization
    Substantial part of business with other non related entities -key
    Rule of thumb = Less than 10% of related party revenues for those services
    Commonly obtained from other organizations
    Charge is in line with open market
    If meets the 1010 exception criteria – no adjustment is necessary
    78
  • 79. Home Health Agency Cost Report
    How to Compute Related Party Costs?
    Medical supply sells to home health agency
    Common ownership and control
    Expense on home health books = revenue on medical supply company books from sales to home health agency
    HHA expenses represents 30% of total revenue of medical supply
    Chapter 10 = HHA should be 30% of “ALLOWABLE” expenses of medical supply company
    ALLOWABLE expenses = compliant to CMS 15-1 regulations
    CMS 15-1 = eliminate profit of medical supply company from costs of home health
    79
  • 80. Home Health Agency Cost Report
    Medical Supply Company
    - Revenue $300,000
    - Expense $250,000
    - Net Income $ 50,000
     
    Home Health Agency (medical supply expense)
    - Amount charged $ 90,000
    • HHA % ($90,000 / $300,000 = 30%)
    • 81. CMS 15-1 applies
    - Amount allowable ($250,000 * 30%) $ 75,000
    - Cost report Worksheet A-6 adjustment ($ 15,000)
    80
  • 82. Home Health Agency Cost Report
    Home Office is defined as a chain organization
    “Consists of a group of two or more health care facilities or at least one health care facility and any other business entity owned, leased, or through any other device, controlled by one organization”
    Home offices usually furnish central management and administrative services such as centralized accounting, purchasing, personnel services, management direction and control, and other services
    81
  • 83. Home Health Agency Cost Report
    Home Office Costs are Subject to CMS 15-1 Rules
    Home Office Cost Allocation Methodologies
    Direct
    Direct assignment of costs
    Attributed to specific provider or non-provider entity
    Functional
    Costs that cannot be directly assigned
    Allocation must be made in a manner reasonably related to the services received (i.e., space occupancy based on square footage)
    82
  • 84. Home Health Agency Cost Report
    Home Office Cost Allocations
    Pooled
    Residual amount of costs (pool of costs)
    Least sophisticated and allocated based on the benefitting entities total costs
    CMS Form 287-05
    Home Office Cost Statement
    Required to be submitted to Medicare Intermediary
    Home office accounting period can be different from the cost reporting period of a chain provider
    83
  • 85. Home Health Agency Cost Report – Worksheet A-7
    84
  • 86. Home Health Agency Cost Report
    Worksheet A-7 – Analysis of Changes in Capital Asset Balances
    Land, building, equipment, etc.
    Beginning balance
    Purchases
    Disposals & retirements
    Ending balance
    85
  • 87. Home Health Agency Cost Report – Worksheet B
    86
  • 88. Home Health Agency Cost Report – Worksheet B
    87
  • 89. Home Health Agency Cost Report – Worksheet B-1
    88
  • 90. Home Health Agency Cost Report
    Worksheet B & B-1
    Allocation of overhead costs to patient care cost centers (Step down)
    Statistical bases (unit cost multiplier)
    Capital costs – Bldg – square footage
    Capital costs – MME – square footage or $ value
    Plant operation – square footage
    Transportation – mileage
    Administrative and General – accumulated costs
    89
  • 91. Home Health Agency Cost Report
    Multiple or Fragmented A&G Cost Centers
    Referred to as unique cost centers
    Allocation Order
    (1) A & G Shared Costs,
    (2) A & G Reimbursable Costs, and
    (3) A & G Non-reimbursable Costs.
    (CMS-Pub. 15-2-32, Transmittal No. 4, March 01, 1997)
    RHHI approval required 90 days prior to the beginning of the cost reporting period (CMS 15-1 Section 2307)
    90
  • 92. Home Health Agency Cost Report – Worksheet C PT I
    91
  • 93. Home Health Agency Cost Report – Worksheet C PT II
    92
  • 94. Home Health Agency Cost Report
    Worksheet C
    Computes cost per visit for each reimbursable service
    Costs are carried over from Worksheet B column 6
    Medical supplies and drugs
    Total charges are input and used to determine unit cost multiplier
    Settlement on drugs
    93
  • 95. Home Health Agency Cost Report – Worksheet C PT III
    94
  • 96. Home Health Agency Cost Report
    Medicare Drugs - Vaccines / Injections
    These services are reimbursed through the Drugs
    cost center (line 13)
    Charges must be the same for all payers
    Cash versus accrual basis (gross up if not the same)
     Subject to lower of cost or charge
     No coinsurance amounts
    95
  • 97. Home Health Agency Cost Report – Worksheet D PT I
    96
  • 98. Home Health Agency Cost Report
    Lower of Cost or Charge Comparison with Drug Costs
    Column 2- enter pneumococcal, influenza and hepatitis vaccines charges
    Column 3- enter osteoporosis drug charges
    Lower of cost or charge is carried forward and included in Part II of this worksheet
    97
  • 99. Home Health Agency Cost Report – Worksheet D PT II
    98
  • 100. Home Health Agency Cost Report
    Medicare PPS Payments by Episode Type
    Information comes directly from PS&R report
    Medicare PPS payments by episode type (base payment and outlier portion)
    Lower of cost or charge comparison for drugs services on Worksheet C
    Computes Medicare settlement on drugs
    99
  • 101. Home Health Agency Cost Report – Worksheet D-1
    100
  • 102. Home Health Agency Cost Report
    Total Medicare Payments
    Payments for PPS comes from the PS&R report
    Include payments related to pneumococcal, influenza, hepatitis and osteoporosis drugs and administration
    Should be maintained internally
    PS&R shows what has been processed up to the date of the report
    101
  • 103. Home Health Agency Cost Report
    Worksheet F - Balance Sheet
    Worksheet F-1 - Income Statement
    Worksheet F-2 - Statement of Changes in Fund Balance
    – Must match internal or audited financial statements
    102
  • 104. Cost Report Requirement
    CMS Form 339
    Required for acceptable cost report
    Sections that apply to home health
    - A. Provider organization and operation
    - B. Financial data and reports
    - E. Approved education activities
    - I. Medicare bad debts
    - J. Bed complement
    - K. PS&R data
    103
  • 105. Contact Information
    Mark N. Tsiames, CPA, CVA
    Principal
    Simione Consultants, LLC
    800-949-0388 ext 109
    mtsiames@simione.com
    104
    Maureen Laskowski
    Director, Cost reporting
    Simione Consultants, LLC
    800-653-4043 ext 136
    mlaskowski@simione.com
    Lisa M. Lapin
    Principal
    Simione Consultants, LLC
    800-653-4043 ext 207
    llapin@simione.com

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